Recognized Gains and Losses Must Be Properly Classified

question 70

Multiple Choice

Recognized gains and losses must be properly classified.Proper classification depends upon:

• A) The tax status of the property.
• B) The type of transferor and transferee when the property is disposed of.
• C) The holding period of the property.
• D) a. and c.
• E) None of the above.

---

Definitions:

Fixed Costs

Costs that are constant regardless of the volume of goods or services produced by a company, including lease payments and maintenance expenditures.

Variable Costs

Disbursements that are contingent upon the magnitude of production or sales transactions.

Contribution Margin

The amount by which the sale of a product or service exceeds its variable costs, contributing to covering fixed costs and generating profit.

Variable Cost

A cost that varies directly with the level of production or sales volume.